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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 11-K
---------------
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
Commission File Number 1-10560
A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM THAT OF
THE ISSUER NAMED BELOW:
BENCHMARK ELECTRONICS, INC. 401(K) EMPLOYEE SAVINGS PLAN
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE ADDRESS OF
ITS PRINCIPAL EXECUTIVE OFFICER:
BENCHMARK ELECTRONICS, INC.
3000 TECHNOLOGY DRIVE
ANGLETON, TEXAS 77515
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<PAGE>
REQUIRED INFORMATION
The following financial statements and schedules have been prepared in
accordance with the financial reporting requirements of the Employee Retirement
Income Security Act of 1974, as amended:
1. Statements of Net Assets Available for Plan Benefits as of December 31, 1998
and 1997
2. Statement of Changes in Net Assets Available for Plan Benefits for the year
ended December 31, 1998
3. Item 27(a) - Schedule of Assets Held for Investment Purposes at December 31,
1998
4. Item 27(d) - Schedule of Reportable Transactions for the Year Ended December
31, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed by the undersigned
hereunto duly authorized.
BENCHMARK ELECTRONICS, INC.
401(K) EMPLOYEE SAVINGS PLAN
By: /s/ GAYLA J. DELLY
Gayla J. Delly
TREASURER
Date: JULY 1, 1999
-ii-
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Benchmark Electronics, Inc.:
We consent to incorporation by reference in the registration statement on
Form S-8 (No. 333-28997) of Benchmark Electronics, Inc. of our report dated May
6, 1999, related to the statements of net assets available for plan benefits of
the Benchmark Electronics, Inc. 401(k) Employee Savings Plan as of December 31,
1998 and 1999, and the related statement of changes in net assets available for
plan benefits for the year ended December 31, 1998, and all related schedules,
which report appears in the December 31, 1998 annual report on Form 11-K of
Benchmark Electronics, Inc. 401(k) Employee Savings Plan.
KPMG LLP
Houston, Texas
July 1, 1999
<PAGE>
BENCHMARK ELECTRONICS, INC.
401(K) EMPLOYEE SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 AND 1997
(WITH INDEPENDENT AUDITORS'
REPORT THEREON)
<PAGE>
BENCHMARK ELECTRONICS, INC.
401(K) EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS
Independent Auditors' Report
Statements of Net Assets Available for
Plan Benefits at December 31, 1998 and 1997
Statement of Changes in Net Assets Available
for Plan Benefits for the year ended
December 31, 1998
Notes to Financial Statements
SCHEDULES
-----------
Item 27(a) - Schedule of Assets Held for Investment Purposes
at December 31, 1998........................................... 1
Item 27(d) - Schedule of Reportable Transactions
for the Year Ended December 31, 1998........................... 2
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Benchmark Electronics, Inc.:
We have audited the accompanying statements of net assets available for plan
benefits of the Benchmark Electronics, Inc. 401(k) Employee Savings Plan (the
Plan) as of December 31, 1998 and 1997, and the related statement of changes in
net assets available for plan benefits for the year ended December 31, 1998.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1998 and 1997, and the changes in net assets available for benefits
for the year ended December 31, 1998 in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplementary schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
KPMG LLP
May 6, 1999
<PAGE>
BENCHMARK ELECTRONICS, INC.
401(K) EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
------------- ------------
<S> <C> <C>
Assets:
Investments, at fair value:
Principal Mutual Life Insurance Company Guaranteed Interest
Accounts with maturity dates as follows
1997 $ - 247,777
1998 223,723 233,870
1999 353,636 361,991
2000 415,554 424,544
------------- ------------
992,913 1,268,182
Pooled Mutual Funds
Morley Stable Value Fund 7,220,385 6,229,371
Federated Max-Cap Fund Institutional Class 7,837,955 5,552,087
Fidelity Advisor Growth Opportunities Fund 5,482,742 3,197,503
Franklin Custodian Funds - Income Series 2,046,063 1,640,795
Templeton Foreign Fund 946,330 746,079
Money Market 52,293 15,965
------------- ------------
23,585,768 17,381,800
Benchmark Electronics, Inc. Common Stock Fund 5,876,223 3,583,878
Participants' notes receivable 658,841 658,605
------------- ------------
Total investments 31,113,745 22,892,465
------------- ------------
Receivables:
Employer contributions 94,741 45,444
Participant contributions 198,622 64,117
------------- ------------
Total receivables 293,363 109,561
------------- ------------
Total assets 31,407,108 23,002,026
Liabilities - excess contributions due to participants 31,732 -
------------- ------------
Net assets available for plan benefits $ 31,375,376 23,002,026
============= ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BENCHMARK ELECTRONICS, INC.
401(K) EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Year ended December 31, 1998
Additions to net assets attributed to:
Investment income:
Interest $ 96,332
Dividends 560,787
Net gain on sale of investments 223,142
Net appreciation in fair value of investments 4,402,943
Other income 87,411
-----------
5,370,615
-----------
Contributions:
Employer 1,116,313
Participant 3,099,523
Rollovers 946,977
-----------
5,162,813
-----------
Total additions 10,533,428
Benefits paid to participants 2,160,078
-----------
Net increase 8,373,350
Net assets available for plan benefits:
Beginning of year 23,002,026
-----------
End of year $31,375,376
===========
See accompanying notes to financial statements.
<PAGE>
BENCHMARK ELECTRONICS, INC.
401(K) EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
(1) DESCRIPTION OF PLAN
The following description of the Benchmark Electronics, Inc. 401(k)
Employee Savings Plan (the Plan) provides only general information.
Participants should refer to the Plan agreement for more complete
information.
(A) GENERAL
The Plan is a defined contribution plan covering all employees of
Benchmark Electronics, Inc. (the Company), who have one year of
service and have attained the age of 21. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
(B) CONTRIBUTIONS AND INVESTMENT OPTIONS
The Plan states that participants may elect to defer up to 17% of
their compensation, as defined, provided that the maximum annual
additions (which includes employer contributions) do not cause the
Plan to exceed the maximum amount allowable as a deduction to the
participant under provisions of the Internal Revenue Service Code.
Participant contributions will be matched by the Company on a 50%
basis, not to exceed 3% of a participant's compensation (referred to
as employer contributions).
Participants may direct all contributions to any of the following
investment options.
Guaranteed Interest Account - Funds are invested in a guaranteed
investment contract with Principal Mutual Life Insurance Company
(note 4). The underlying assets in the Guaranteed Interest
Accounts are invested mostly in private placement bonds,
commercial mortgages, and residential mortgages.
Money Market Fund - Funds are invested in money market
instruments.
Morley Stable Value Fund - Funds are invested in a diversified
pool of stable value assets, including investment contracts
issued by insurance companies, banks and other financial
institutions, to provide a consistent rate of return, while
preserving capital and minimizing risk.
Fidelity Advisor Growth Opportunities Fund - Funds are invested
in traditional growth stocks, companies with above-average growth
in sales or earnings, plus other opportunities such as special
situations, debt securities and cyclicals.
Federated Max-Cap Fund Institutional Class - Funds are invested
in the stocks of large capitalization, primarily domestic
companies represented in the S&P 500 stock index.
Franklin Custodian Funds - Income Series - Funds are invested in
a diversified portfolio of securities selected with particular
consideration of income production.
(Continued)
<PAGE>
2
BENCHMARK ELECTRONICS, INC.
401(K) EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Templeton Foreign Fund - Funds are invested in stocks and debt
obligations of companies and governments outside the United
States.
Benchmark Electronics, Inc. Common Stock Fund - Funds are
invested in common stock of the Company.
(C) VESTING
Participants are immediately vested in their contributions to the Plan
plus actual earnings thereon. The Plan provides for a 20% vesting in
employer contributions after two years of employment and an additional
20% vesting annually until the participant is 100% vested after six
years.
Nonvested employer contributions are forfeited upon the participant's
receipt of a distribution of his/her vested balance. If the
participant is subsequently reemployed before incurring five
consecutive one-year breaks in service and such participant had
received a distribution of his entire vested interest prior to his
reemployment, amounts forfeited may be reinstated if the rehired
participant repays to the Plan the amounts previously distributed upon
his/her prior termination.
(D) PARTICIPANTS' NOTES RECEIVABLE
Upon written application by a participant, the Plan administrator may
make loans to participants not to exceed 50% of the participants'
401(k) balance, with a minimum of $1,000. Loans are to be repaid by
level monthly payroll deductions of principal plus interest or may be
prepaid in full or in part without penalty at any time.
(E) ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan are paid by the Company.
(F) PAYMENT OF BENEFITS
On termination of service, a participant may elect to receive either a
lump-sum amount equal to the vested value of his/her account or an
annuity with various terms and rates.
(G) TERMINATION OF THE PLAN
Although the Company has not expressed any intent to terminate the
Plan, it may do so as provided by the Plan agreement. Following
termination of the Plan, each participant shall become fully vested in
their participant account.
(Continued)
<PAGE>
3
BENCHMARK ELECTRONICS, INC.
401(K) EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(2) SUMMARY OF ACCOUNTING POLICIES
(A) BASIS OF FINANCIAL STATEMENTS
The financial statements of the Plan are prepared under the accrual
method of accounting.
(B) INVESTMENT VALUATION
The Plan's investments are stated at fair value. Insurance contracts
with Principal Mutual Life Insurance Company (Principal) (note 4) are
reported in the accompanying financial statements at fair value as
reported by Principal. The common shares of the Company are valued at
its quoted market price. Participants' notes receivable are recorded
at cost which approximates their fair value. All other investments are
stated at fair value, as reported by the trustee.
(C) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
additions to and deductions from net assets during the reporting
period. Actual results could differ from those estimates.
(D) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(3) PLAN AMENDMENT
Effective April 1, 1997, the custodian of the Plan changed from Principal
to Chase Bank of Texas National Association (Chase).
(Continued)
<PAGE>
4
BENCHMARK ELECTRONICS, INC.
401(K) EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(4) INSURANCE CONTRACT WITH PRINCIPAL
Pursuant to the terms of the Plan, the Plan administrator has entered into
an insurance contract with Principal, whereby contributions made by the
Company are deposited and maintained in Principal's Guaranteed Interest
Accounts. The Plan has entered into a five-year guarantee in which the
interest rate earned on the commingled investments of the Guaranteed
Interest Accounts for the years ending December 31, 1998 and 1997 is
guaranteed for the remaining years of the guarantee period.
(5) FEDERAL INCOME TAX EXEMPTION
The Internal Revenue Service has determined and informed the Company by a
letter dated January 5, 1998, that the Plan and related trust are designed
in accordance Section 401(a) of the Internal Revenue Code of 1986 (IRC)
and, accordingly, to be entitled to an exemption from federal income taxes
under the provisions of Section 501(a). The Plan administrator believes
that the Plan is designed, and is currently being operated in compliance
with the appropriate IRC sections.
(6) RECONCILIATION OF CHANGE IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
REPORTED IN FORM 5500
Reconciliation of the change in net assets available for plan benefits
reported in the accompanying statement to the amount reported to the
Internal Revenue Service in the Plan's Form 5500 for the year ended
December 31, 1998 is as follows:
Net change in net assets available for plan
benefits reported per the Form 5500 $8,111,719
Adjustment in contributions from employer 94,741
Adjustment in contributions from participants 166,890
----------
Net change in net assets available for plan
benefits as reported herein $8,373,350
==========
(7) INVESTMENTS
The following table presents investments that represent 5 percent or more
of the Plan's net assets as of December 31, 1998:
Federated Max-Cap Fund Institutional Class $ 7,837,955
Morley Stable Value Fund 7,220,385
Benchmark Electronics, Inc. Common Stock Fund 5,876,223
Fidelity Advisor Growth Opportunities Fund 5,482,742
Franklin Custodian Funds - Income Series 2,046,063
(Continued)
<PAGE>
5
BENCHMARK ELECTRONICS, INC.
401(K) EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(8) STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
GUARANTEED GUARANTEED GUARANTEED GUARANTEED
INTEREST ACCOUNT INTEREST ACCOUNT INTEREST ACCOUNT INTEREST ACCOUNT
MATURING MATURING MATURING MATURING
1997 1998 1999 2000
----------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Additions to net assets attributable to:
Investment income:
Interest 6,131 9,224 13,594 14,075
Dividends - 7,274 12,003 11,136
Net gain (loss) on sale of investments - - - -
Net appreciation (depreciation) in
fair value of investments - - - -
Other income - - - -
-------- -------- --------- --------
6,131 16,498 25,597 25,211
-------- -------- --------- --------
Contributions:
Employer - - - -
Participant - - - -
Rollovers - - - -
-------- -------- --------- --------
- - - -
-------- -------- --------- --------
Total additions 6,131 16,498 25,597 25,211
-------- -------- --------- --------
Deductions - benefits paid to participants - 24,256 29,424 27,651
-------- -------- --------- --------
Interfund transfers (253,908) (2,389) (4,528) (6,550)
-------- -------- --------- --------
Net increase (decrease) (247,777) (10,147) (8,355) (8,990)
Net assets available for plan benefits:
Beginning of year 247,777 233,870 361,991 424,544
-------- -------- --------- --------
End of year - 223,723 353,636 415,554
======== ======== ========= ========
</TABLE>
<TABLE>
<CAPTION>
FEDERATE FIDELITY FRANKLIN
MORLEY MAX-CAP ADVISOR CUSTODIAN
MONEY STABLE FUND GROWTH FUNDS -
MARKET VALUE INSTITUTIONAL OPPORTUNITIES INCOME
FUND FUND CLASS FUND SERIES
-------- ------------ --------------- ---------------- ---------------
<S> <C>
Additions to net assets attributable to:
Investment income:
Interest 1,773 - - - -
Dividends - - 153,633 208,238 143,503
Net gain (loss) on sale of investments - 55,296 98,388 35,197 (11,212)
Net appreciation (depreciation) in
fair value of investments - 341,248 1,373,985 677,528 (115,075)
Other income 780 (1,669) 695 15,118 (316)
-------- --------- ---------- --------- ---------
2,553 394,875 1,626,701 936,081 16,900
-------- --------- ---------- --------- ---------
Contributions:
Employer - 319,484 227,848 260,694 86,347
Participant - 828,889 680,435 760,547 249,998
Rollovers 287 139,204 281,095 245,653 91,929
-------- --------- ---------- --------- ---------
287 1,287,577 1,189,378 1,266,894 428,274
-------- --------- ---------- --------- ---------
Total additions 2,840 1,682,452 2,816,079 2,202,975 445,174
-------- --------- ---------- --------- ---------
Deductions - benefits paid to participants 138 979,681 412,321 214,660 78,289
-------- --------- ---------- --------- ---------
Interfund transfers 33,626 288,243 (117,890) 296,924 38,383
-------- --------- ---------- --------- ---------
Net increase (decrease) 36,328 991,014 2,285,868 2,285,239 405,268
Net assets available for plan benefits:
Beginning of year 15,965 6,229,371 5,552,087 3,197,503 1,640,795
-------- --------- ---------- --------- ---------
End of year 52,293 7,220,385 7,837,955 5,482,742 2,046,063
======== ========= ========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
BENCHMARK
TEMPLETON ELECTRONICS, INC. PARTICIPANTS'
FOREIGN COMMON NOTES
FUND STOCK FUND RECEIVABLE RECEIVABLES
-------------- ------------------- --------------- ---------------
<S> <C>
Additions to net assets attributable to:
Investment income:
Interest - - 51,535 -
Dividends 25,000 - - -
Net gain (loss) on sale of investments (17,133) 62,606 - -
Net appreciation (depreciation) in
fair value of investments (137,163) 2,262,420 - -
Other income 73,190 (387) - -
--------- ---------- --------- ---------
(56,106) 2,324,639 51,535 -
--------- ---------- --------- ---------
Contributions:
Employer 66,865 105,778 - 49,297
Participant 192,540 294,780 2,933 121,133
Rollovers 22,485 120,793 32,159 13,372
--------- ---------- --------- ---------
281,890 521,351 35,092 183,802
--------- ---------- --------- ---------
Total additions 225,784 2,845,990 86,627 183,802
--------- ---------- --------- ---------
Deductions - benefits paid to participants 24,844 311,650 57,164 -
--------- ---------- --------- ---------
Interfund transfers (689) (241,995) (29,227) -
--------- ---------- --------- ---------
Net increase (decrease) 200,251 2,292,345 236 183,802
Net assets available for plan benefits:
Beginning of year 746,079 3,583,878 658,605 109,561
--------- ---------- --------- ---------
End of year 946,330 5,876,223 658,841 293,363
========= ========== ========= =========
</TABLE>
TOTAL AT
LIABILITIES 1998
------------- -------------
Additions to net assets attributable to:
Investment income:
Interest - 96,332
Dividends - 560,787
Net gain (loss) on sale of investments - 223,142
Net appreciation (depreciation) in
fair value of investments - 4,402,943
Other income - 87,411
---------- ----------
- 5,370,615
---------- ----------
Contributions:
Employer - 1,116,313
Participant (31,732) 3,099,523
Rollovers - 946,977
---------- ----------
(31,732) 5,162,813
---------- ----------
Total additions (31,732) 10,533,428
---------- ----------
Deductions - benefits paid to participants - 2,160,078
---------- ----------
Interfund transfers - -
---------- ----------
Net increase (decrease) (31,732) 8,373,350
Net assets available for plan benefits:
Beginning of year - 23,002,026
---------- ----------
End of year (31,732) 31,375,376
========== ==========
<PAGE>
SCHEDULE 1
BENCHMARK ELECTRONICS, INC.
401 (K) EMPLOYEE SAVINGS PLAN
ITEM 27(A) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1998
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT COST VALUE
---------------------- --------------------------- -------- ----------
<S> <C> <C> <C>
Principal Mutual Life Insurance Co. Guaranteed Interest Account, due 1998 $ 223,723 223,723
Principal Mutual Life Insurance Co. Guaranteed Interest Account, due 1999 353,636 353,636
Principal Mutual Life Insurance Co. Guaranteed Interest Account, due 2000 415,554 415,554
Chase Bank of Texas, National Association Morley Stable Value Fund 6,670,022 7,220,385
Chase Bank of Texas, National Association Federated Max-Cap Fund Institutional Class 5,765,384 7,837,955
Chase Bank of Texas, National Association Fidelity Advisor Growth Opportunities Fund 4,657,707 5,482,742
Chase Bank of Texas, National Association Franklin Custodian Funds - Income Series 2,064,715 2,046,063
Chase Bank of Texas, National Association Templeton Foreign Fund 1,152,905 946,330
Chase Bank of Texas, National Association Money Market Fund 52,293 52,293
Benchmark Electronics, Inc. Common Stock Fund 3,068,007 5,876,223
Participants' notes receivable (rates range from 5.5% to 11.0%
at December 31, 1998, maturing in years 1999 through 2013) 658,841 658,841
-------------- -------------
$ 25,082,787 31,113,745
============== =============
</TABLE>
See accompanying independent auditors' report.
<PAGE>
SCHEDULE 2
BENCHMARK ELECTRONICS, INC.
401 (K) EMPLOYEE SAVINGS PLAN
ITEM 27(D) - SCHEDULE OF REPORTABLE TRANSACTIONS
Year ended December 31, 1998
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSET ON
IDENTITY OF PARTY DESCRIPTION PURCHASE SELLING COST TRANSACTION NET
INVOLVED OF ASSET PRICE PRICE OF ASSETS DATE GAIN
- ------------------- --------------- ------------ ---------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Morley Capital Morley Stable Value
Management Fund $ 2,242,730 1,648,260 1,548,212 1,648,260 100,048
Federated Federated Max-Cap Fund
Management Institutional Class 1,859,626 1,046,132 846,699 1,046,132 199,433
Fidelity Management Fidelity Advisor Growth
& Research Opportunities Fund 2,174,030 601,516 554,788 601,516 46,728
Benchmark Common Stock Fund 1,170,303 1,203,028 1,030,031 1,203,028 172,997
=========== ========== ========== ========== ==========
</TABLE>
(1) Reportable transactions are transactions or series of transactions in excess
of 5% of the current value of plan assets at the beginning of the year and
are defined in 29 CFR 2520.103-6 of the Department of Labor's Rules and
Regulations.
See accompanying independent auditors' report.
